Monday, October 26, 2020

B.C. announces a public inquiry into money laundering

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B.C.’s New Democrat government has launched a public inquiry into money laundering with Premier John Horgan touting it as necessary to protect the affordability of housing for British Columbians.

B.C. Supreme Court Justice Austin F. Cullen has been appointed to head the inquiry, which will look at the full scope of money laundering in British Columbia, including real estate, gambling and financial institutions. He will also examine regulatory authorities and barriers to effective law enforcement of money laundering.

He will have the power to compel witnesses to testify and order disclosure of information.

Horgan announced the decision Wednesday after a cabinet meeting in which his ministers debated an independent commission of inquiry into how criminal organizations have laundered dirty drug money through the provincial economy.

An interim report is due within 18 months and a final report by May 2021. The B.C. election is scheduled for October 2021.

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“The timing of it is the timing of it,” said Horgan. He added Cullen will not be constrained in any way in terms of how far back he can investigate or the scope of who he calls as witnesses.

“I believe that British Columbians want to know how this was allowed to happen in British Columbia,” said Horgan.

“The commissioner is not constrained in terms his timelines, he can go as far back as he needs to, to get answer for British Columbians. This is about making sure there is accountability.”

If that scope goes back to the 1990s NDP government, it would be prepared to waive any cabinet privileges on documents to make them public, said Horgan. The NDP has called on the previous Liberal government to do the same, but it has refused.

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“We are not constraining the commissioner in any way,” said Horgan.

“I will say the gaming in the ’90s was a shadow of what we see today in terms of the magnitude of the betting limits and scale and places to launder money. But we’re not afraid of that at all.”

Reaction was swift.

The B.C. Government Employees Union, which represents 27,000 workers, two thirds of them working directly for the B.C. government, immediately applauded the inquiry, as did the B.C. Green party and the B.C. caucus of the federal Conservatives. Vancouver Mayor Kennedy Stewart and Port Coquitlam Mayor Brad West also endorsed the inquiry.

The New Car Dealers Association, which represents 390 new car dealers in B.C., said it welcomed any opportunity to contribute to the inquiry.

“We have an obligation to British Columbians to get to the bottom of this,” said Horgan. “The proceeds of crime are distorting the lives of British Columbians. This is not an intellectual exercise for families who can’t afford to live in homes in Vancouver and Victoria and Kelowna. This is a real-time issue for people. And the challenges we have been able to uncover … is just the tip of the iceberg.”

The inquiry comes after reports commissioned for the B.C. government by a former deputy RCMP commissioner, Peter German, and an expert panel led by a Simon Fraser University public policy professor, Maureen Maloney.

The report said money laundering was taking place in Lower Mainland casinos and in B.C.’s real estate and luxury car sectors. The expert panel estimated money laundering in B.C. at $7.4 billion in 2018. Somewhere between $800 million and $5.3 billion could have been laundered through real estate, the expert panel determined, depending on the method used to make the estimate. The panel said money laundering may have affected house prices by five per cent, possibly more in the Lower Mainland.

The German report said money laundering in B.C. involved international organized crime groups, including from Mexico, Iran and mainland China that are involved with homegrown, outlaw biker gangs.

The B.C. Liberals, who were in power when housing prices shot up several years ago, said they would co-operate fully with the inquiry.

Liberal MLA Rich Coleman, who was solicitor general with responsibility for gambling, said he was confident his government had done nothing wrong. “I am quite happy with an inquiry. It will finally get past some of this innuendo and accusation, and let’s get down to some facts,” said Coleman.

But both Coleman and Michael Lee, the Liberal’s attorney general critic, said it was “premature” to decide whether they would waive cabinet confidentiality on documents relevant to the inquiry.

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Eby said he received an offer of support for the inquiry from federal minister Bill Blair, while Horgan said he’s received assurances from Prime Minister Justin Trudeau the federal government would co-operate.

In a written statement, Blair, the minister of border security and organized crime reduction, said: “I have informed Attorney General Eby that our government will cooperate with the province of British Columbia and continue to work collaboratively … on intelligence gathering and information sharing.”

Federal officials, including RCMP officers, have testified at previous B.C. public inquiries, including the $9.8-million missing women inquiry and the $5.3-million inquiry into the death of Robert Dziekanski at Vancouver International Airport.

Eby noted that some individuals have refused to participate in the German and Maloney reviews, including some luxury car resellers. “We are done with asking nicely,” he said.

Cullen will be given the power to apply for court orders to enter private property and seize records. Anyone who does not co-operate could be found in contempt of court, said Eby.

Cullen worked as a Crown prosecutor in B.C. from 1976 to 1980, and again from 1984 to 1999, before he became assistant deputy attorney general for the criminal justice branch. Eby said that branch is politically independent and Cullen is still appropriate to investigate government activity during that time. Cullen was appointed to the B.C. Supreme Court in 2001.

The inquiry terms of reference require Cullen to forward any information to the appropriate agencies if he believes that any evidence points to criminal offences, while specifying that the inquiry is not to jeopardize any continuing criminal investigation.

Money laundering has been under the spotlight in B.C., a result of revelations uncovered in a Postmedia investigation in 2017 that found potentially millions of dollars were being laundered through Lower Mainland casinos.

A separate Postmedia investigation, published in February, found that money-laundering prosecutions were rare and difficult in B.C.

Multiple police investigations with ties to money laundering since 2015 had resulted in at least 17 arrests, but no charges.

[pdf-embedder url=”https://fcced.com/wp-content/uploads/2019/05/410172870-B-C-Money-Laundering-Inquiry-Terms-of-Reference.pdf”]

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